As we’ve mentioned before, a company’s functional currency is the main currency a company uses in its daily operations.

Given situations that may arise in the economic environment, i.e. change in the official currency used in the country the entity operates, the company is also required to change its functional currency. 

For changing the functional currency, a company must take care of the following:

• Changing it’s accounting software so it’s functional currency now is the new currency;
• Translate all brought forward balances into the new currency (all balance sheet accounts and ledgers);
• Review and all agreements with customers, suppliers;
• Update your pricing lists;
• Update all internal documents for proper currency references and prices;
• Any other requirement set in the regulations that are affected.

Moving from one functional currency to another may be a difficult and time consuming process, so the sooner you start working on it, the better. At the end of the day you need ensure your business is up and running after the change so take good care of all affected software, processes happening externally and internally and don’t forget to keep track on all of it.